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COMMENT: All Telstra Wants Is A Monopoly Again, Bugger The Consumer

Telstra was born in 1975, when they transitioned from being a state owned, enterprise with a massive telephone monopoly, now as they struggle to compete, they are desperate to get back to being a monopoly, especially in rural Australia where their idea of eliminating competition is to cuddle up to arch rival TPG and take control of valuable spectrum.

Telstra and TPG Telecom will not know whether they have a green light from the Australian Competition & Consumer Commission to enter a mobile network and spectrum sharing agreement in regional Australia until the last quarter of 2022 and if they are allowed to get away with their audacious monopoly play, it brings into question the whole concept of the definition of a monopoly according to the ACCC.

While copper wires and old fashioned, telephone handsets delivered Telstra rivers of gold in the past and a monopoly, this evaporated as Australians took to mobile phones and broadband communication.

Suddenly Telstra had to compete, and this is where things started to go pear shaped.

Their Telstra shops were a disaster despite reincarnation after reincarnation with JB Hi Fi now the top seller of mobile phones in Australia.

They even tried a cheap network approach with the launch of Belong a broadband and mobile company that’s owned entirely by Telstra.

Founded in 2013 the business is today not taken seriously, as brands such as Boost Mobile carve up the value and pre-paid markets with the business heading to a target of two million consumers.

Research shows that Telstra is a disliked brand with the only plus being that they have a strong 4G and 5G network.

During COVID, lockdowns the market got fed up with hearing the now dumped CEO Andy Penn, basically whinging about the NBN as being uncompetitive, as competitors such as Optus and others stripped share away from Telstra.

After selling the NBN their copper cable network Telstra suddenly found their marketing lacking when it came to building trust among consumers with consumers questioning their ability to deliver ongoing customer service.

All of a sudden Telstra who is now buying their NBN connectivity at the same price as their competitors is finding the going tough with several plays in the tele health, B2b and cloud-based apps market struggling.

During COVID lock downs Telstra had their PR hacks claiming NBN was a big problem when it came to pricing Vs speed.

Telstra CEO andy Penn who leaves the network in October, did this in an effort to get consumers to buy 5G connectivity for the home over NBN from Telstra, because he could make more margin.
Even this exercise is struggling to get traction with the likes of Netgear and ZTE reporting poor sales of their 5G home or business hubs.

Telstra spin doctors then claimed that “NBN’s plot to increase prices”, would be a failure and a wasted opportunity.

NBN Co wants to lock in price rises until 2040 and double the price of entry-tier plans over the next decade, it revealed in a redacted submission published by the Australian Competition and Consumer Commission (ACCC) last week.

The figures show that by applying NBN Co’s current forecasts the cost to retailers to acquire the entry level speed tier would double by around 2033 and continue to increase towards $104 per month in nominal terms by 2040.

Penn wants a monopoly in the bush because of the high cost of doing business over vast rural areas.

Yesterday New Nationals leader David Littleproud has described Telstra’s dominance in the regions as a cancer and says the proposal for the company to share its network with rival TPG will be an early test of the Albanese government.

It will also be a test of how the new ACCC Chair Gina Cass-Gottlieb defines a monopoly, as Australia only has three core players in the rural communication market, and if that becomes two and Telstra and TPG become owners of valuable spectrum and network towers that could easily go down during a storm, it leaves only one other player Optus.

Littleproud, claims that it’s most likely Telstra would shutter existing assets in the regions and leave rural communities worse off if the deal was approved.

The ACCC has kicked off a two-week consultation process and will make a ruling on the merger in October, submissions from the likes of Optus are expected in the next fortnight.

If their objection is overruled the monopoly building will start immediately with TPG given approval to share 3700 of Telstra’s 11,000 towers.

In return Telstra to TPG’s low-band mobile spectrum. TPG will pay Telstra between $1.6bn and $1.8bn over 10 years for access.

Littleproud claims the proposal is “frightening” and would lead to a reduction in quality and range of mobile service.

Penn who is desperate to get the deal over the line before he leaves Telstra told The Australian Mr Littleproud’ s statements were “complete rubbish”.

“After nine years in government he has failed to deliver anything for the bush – USO reform, adequate service standards or pricing on the regional NBN, or a reliable power supply on which critical services depend,” he said.

Mr Littleproud is calling on reform of the universal service guarantee – which assures Australians access to broadband and voice services – to extend to mobile phone towers, along with mandated roaming, allowing customers to use towers no matter which provider they are with.

The 2021 Regional Telecommunications Review, tabled to parliament in February, found that bush services are often unreliable and that regional users often have to pay more than city users to stay connected.

Commpete chairman Michelle Lim told the Australian, the deal would be a step backward for the sector.

“This proposed merger begs the question about whether we’re heading straight back to a monopoly arrangement for mobile infrastructure in an environment where mobile regulation – or lack thereof – already unduly favours scale and incumbency,” Ms Lim said.

“Commpete urges the ACCC to apply utmost scrutiny in this inquiry. Concentrated control over national spectrum resources risks foreclosing mobile market opportunities for other competitors, so this merger cannot simply be ushered through.”

Before he departed, former ACCC chairman Rod Sims warned of potential price rises as a result of the network sharing deal, indicating that it might lead to less competition and higher prices.

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